The Home Equity Theft Reporter

Welcome to The Home Equity Theft Reporter, a blog dedicated to informing the consumer public and the legal profession about Home Equity Theft issues. This blog will consist of information describing the various forms of Home Equity Theft and links to news reports & other informational sources from throughout the country about the victims of Home Equity Theft and what government authorities and others are doing about it.

Attorneys representing a housing tenant in an eviction dispute with the Metropolitan Housing Alliance(1) in Little Rock have filed a motion seeking class-action status.

Brenda Glover was stripped of her Section 8 housing voucher by the housing authority last year when her landlord sent her a 10-day eviction notice.

She argued that she had proof her rent had already been paid in an agreement signed by her landlord, but the housing authority didn't reinstate her benefits until she filed suit against them in November 2014.

Even though the alliance reinstated her housing voucher that November, her attorneys moved forward with the lawsuit against the alliance in federal court because, according to documents provided by the housing agency, it had stripped 964 other families of their Section 8 benefits since October 2011 based solely on having received a notice-to-vacate letter.

"MHA's policies and procedures allow families to lose their benefits based upon the uncontested word of tenants' landlords. These landlords are not present at pre-termination hearings, so tenants may never directly challenge their word through cross-examination. Nonetheless, MHA treats this hearsay evidence as dispositive, and any attempt by the plaintiff or class members to challenge the notice to vacate is futile," the original lawsuit complaint says.

The authority's Executive Director Rodney Forte and the agency's attorney have not answered phone messages or emails seeking comment on the lawsuit since it was filed last year. Forte didn't return messages Monday seeking comment on the class-action motion.

Slade filed his motion for class-action status Wednesday.

In Glover's situation, the lawsuit states that her landlord signed an agreement to take August's rent out of her security deposit because she was moving to a smaller unit in September. The landlord then refused to refund the remainder of the deposit, so Glover filed a complaint with the attorney general's office, the lawsuit says.

After hearing about the complaint, the landlord reneged on the agreement and gave Glover a 10-day eviction notice.

The housing authority used that notice as the sole reason for terminating Glover's Section 8 voucher, despite the fact that the U.S. Department of Housing and Urban Development has regulations that prohibit conditioning a termination based on Arkansas' criminal eviction statute, the lawsuit says.

The motion for class-action status argues that the Little Rock housing agency has a practice of treating housing voucher recipients in that way and that deprives them of their protections under federal statutes and their right to due process under the Constitution.

The proposed class is everyone receiving Section 8 housing vouchers from the agency. Slade's law firm has records of the names and addresses of those recipients, the motion says.

The lawsuit seeks clarification on whether it is legal for the housing agency to terminate vouchers based on a landlord's eviction notice without a judicial order, to send termination letters without providing a reason for the termination, to shift the burden of proof at informal hearings requiring voucher recipients to disprove the allegations against them, and to conduct informal hearings with decision-makers who have not received adequate training.

There was no time frame specified for a judge to rule on the request for class-action status.

"I expect that we would have an order either granting or denying the motion no later than the spring," Slade said by email Monday.

(2)Carney Bates & Pulliam is a for-profit law firm based in Little Rock, Arkansas that specializes in class action litigation in areas from consumer protection to environmental hazards to civil rights to data privacy.

Cailfornia AG's Civil Lawsuit Lands Loan Modification Scammer In Jail For Five Years (& Counting), Despite Never Having Been Charged (Much Less Convicted) For A Crime

In Orange County, California, The Orange County Register reports:

Zulmai Nazarzai has been in Orange County jail for five years now, but has never been charged with a crime.

The missing duffel bag stuffed with $360,540 cash that the judge ordered him to turn over back in 2010? It has not reappeared, miraculously or otherwise.

The fantastical explanation Nazarzai gave the judge regarding its disappearance may have been hogwash, and Nazarzai may not have been a very nice guy. But this?

***

THE SCAM

Nazarzai and his then-girlfriend were the masterminds behind a “boiler-room telemarketing operation” that lied to distressed and elderly people on the verge of losing their homes back in 2008 and 2009, prosecutors said in court documents. More than 1,000 people paid $2 million to keep their homes from foreclosure, most often unsuccessfully.

The state attorney general sued them – a civil, not criminal, action – and they were ordered to pay more than $4 million in penalties and restitution. Nazarzai pulled some $370,000 of company funds from the bank and stashed it at his home; the judge ordered him to hand it over to a court receiver.

Nazarzai said he counted out $360,540 in cash from his closet, and gave it to his partner and then-girlfriend to deliver. Fasela Sheren, who went by the name Sharon Fasela, said she packed it in a black duffel bag, drove toward the receiver’s office in Los Angeles, but blacked out on the way. She awoke at a hospital. The car had been towed, and when she reclaimed it, the bag with the money was gone, she said in a deposition.

Orange County Superior Court Judge Andrew Banks called this the most incredulous story he’d ever heard, “and I’ve heard some whoppers.” He ordered Nazarzai to jail for contempt of court until he produced that $360,540.

And Nazarzai has been there ever since. Sheren remained free. She was not held in contempt.

TIME, CRIME

Neither were charged with a crime, though it appears from the court record that they ran a rather unsavory operation that could have produced charges of fraud or the like.

“The Attorney General originally decided to proceed against Mr. Nazarzai civilly, not criminally,” noted Campbell, dean of the Chapman Law School. “Had the AG gone criminally, I doubt Mr. Nazarzai would have been sentenced to five years; and if he had, he’d be out now for good behavior. So, by proceeding civilly, the AG has obtained more jail time than if the AG had started a criminal case.

“Even if a condition of being freed from jail in a criminal case was restitution, Mr. Nazarzai would have been free, and able to work, to pay back at least some of what he (allegedly) defrauded from people. I say ‘allegedly’ since the underlying guilt of Mr. Nazarzai on the matter of fraud has not, apparently, ever been proven.”

Campbell asks, what prevents Nazarzai from life imprisonment? “If nothing, it’s absurd; if there is some line when civil incarceration becomes too much, when will it be reached?”

If Nazarzai was behind bars on criminal charges, attorneys say, at least they could tell him when he’d get out of jail.

We posed these questions to the AG’s office, which responded with a copy of the letter-brief it filed with the Court of Appeal over the summer, which summarizes its position.

Nazarzai is being coercively – not punitively – confined “because of his willful refusal to obey a court order that he turn over $360,540 to the People,” the brief says. “The trial court concluded following trial that, beyond a reasonable doubt, (Nazarzai) has the capability of complying with this order. Substantial evidence supports this conclusion, including...(his) insistence on repeating the same unbelievable tale of the money’s disappearance....

“(T)he key to his freedom is in his pocket - he alone can open the door by complying with the trial court’s order.”

It’s not surprising that Nazarzai continues to “obstinately refuse to turn over the funds when he has already invested such significant time to keep them and has acted on the apparent belief that his release is always just another lunge away,” the AG said.

WHAT’S NEXT

There are precious few inmates in jail on civil charges. Of the 3,222 inmates at Theo Lacy Jail last week, only five of them were in for civil offenses, said Sheriff’s Lt. Jeffrey Hallock.

So how long might someone who has not been accused of a crime languish in jail for civil contempt?

Former lawyer H. Beatty Chadwick set the America record, spending 14 years behind bars under circumstances similar to Nazarzai’s. A Pennsylvania judge ordered Chadwick to place $2.5 million into a court-controlled account during divorce proceedings. Chadwick said he couldn’t, as he had lost the money in bad investments. His wife’s lawyer charged that he actually hid it offshore.

The judge believed the wife. Chadwick went to jail in 1995 for failing to produce the money, and stayed there until 2009, when the court finally agreed that his incarceration had morphed from something coercive into something punitive. Continued jail time wouldn’t result in him producing the money, the court concluded, and he was set free.

Chadwick noted that if he had been convicted of third-degree murder, he would have been out in half the time.

Civil contempt is a rarely used tool, but one that critics say is prone to abuse. The accused must prove a negative – i.e., that they don’t have the money – rather than prosecutors proving that they do. That runs counter to the underpinnings of the American justice system, critics say.

A Henry County real estate broker is facing disciplinary action for allegedly withholding mortgage information from a buyer.

Three years ago, Murl Holstein of Springport sold a 1,400-square-feet apartment house/retail space, built at 2614 S. Madison St. in 1920, to Rhonda Mayse.

She planned to buy the structure, next door to La Hacienda restaurant, on contract for $45,000, with $2,500 down and monthly payments of $500 until Nov. 8, 2022, according to a complaint filed by the Indiana attorney general's office.

In 2007, Holstein had executed a promissory note for $100,000 and secured the debt with a mortgage on 2614 S. Madison, records show. He had promised Mutual Bank to repay the commercial loan by March 30, 2012.

Holstein is accused of failing to notify Mayse that on Nov. 9, 2012 — one day after she made a partial down payment of $2,000 — he had renewed the commercial loan with the bank and continued to secure the debt with a mortgage on 2614 S. Madison. In December of 2012, Mayse paid Holstein another $1,500.

On Sept. 30, 2013, Holstein filed for Chapter 13 bankruptcy, and three months later he surrendered 2614 S. Madison to the bank, which had filed a foreclosure action in court.

According to the complaint, Indiana law required Holstein to provide Mayse written disclosure of the mortgage placed on the property by the promissory note.

The complaint alleges that Holstein has become unfit to practice due to professional incompetence and asks the Indiana Real Estate Commission to impose appropriate disciplinary sanctions. Holstein couldn't be reached for comment. Phone numbers for his real estate office have been disconnected.

A bank is liable for a misrepresentation that induced a homebuyer to buy a foreclosure home with undisclosed water and mold damage, even though the sale contract said the buyer was purchasing the home “as is,” a state appeals court has ruled.

***

At trial, the trial judge informed the jury that an “as is” clause does not relieve a seller from disclosing material adverse facts about a property, though it was Fricano’s burden to prove the bank had knowledge of the property’s condition and did not disclose it.

The jury awarded Fricano $50,000 in compensatory damages, ruling that the bank violated section 100.18(1). The court denied the bank’s motion for judgment notwithstanding the verdict and entered judgment for Fricano. The bank appealed.

The bank noted the “as is” clause and said a violation of section 100.18(1) requires a misrepresentation to a member of “the public,” but Fricano’s negotiating position with the bank, through offers and counteroffers, created a “particular relationship.”

But in Fricano v. Bank of America, 2015AP20 (Dec. 23, 2015), a three-judge panel for the District II Court of Appeals affirmed, upholding the jury verdict for Fricano.

Jury Verdict Affirmed

The panel noted that motions to change a jury’s verdict must be denied unless there is “no credible evidence to sustain a finding in favor of such party.” And trial courts that preside over trials are given substantial deference to make credibility determinations.

The panel concluded that an “as is” provision in a sales contract between buyer and seller does not relieve the seller from liability for material misrepresentations.

“We see no support for the Bank’s argument that the ‘as is’ provision, disclaimers, and waivers in the parties’ contract relieve it from Wis. Stat. § 100.18 (1) liability for its deceptive statement in the contract that it had little to no knowledge of the condition of the property,” wrote Chief Appeals Court Judge Lisa Neubauer.

The panel also ruled that Fricano was a member of the “public” when the bank made its misrepresentation, because the sides had not yet reached a contractual agreement.

“There was no contract between the parties when the Bank misrepresented its knowledge of the condition of the property,” Chief Judge Neubauer wrote.

“[W]e fail to understand how the fact that parties are in negotiations over terms takes the potential purchaser out of the realm of ‘the public.’”

The panel rejected the bank’s claim that Fricano lacked evidence to prove she was induced to purchase the home as a result of any misrepresentation by the bank.

Fricano had testified that she believed the bank could not tell her anything about the property because it was a foreclosure and the bank had not been living there.

“[T]here is more than sufficient credible evidence to believe that had the Bank not misrepresented its knowledge of the condition of the property, Fricano would not have gone forward,” wrote Neubauer, also rejecting the bank’s claim that Fricano had notice of possible defects through a home inspector and should have inquired further.

Federal Budget Squeeze To Make It Less Profitable For Law Enforcement To Seize Money & Property From People Who Haven't Been Charged w/ Crimes & Pocket The Loot Thru Civil Asset Forfeitures

Vox reports:

Quietly, just a few days before Christmas, the federal government made a huge change to the way it cooperates with local police departments: it's no longer giving local police departments a share of money or property seized from people who haven't committed crimes.

For decades, the federal government has basically given local police an easy loophole to let them keep a share of any assets they seize — rather than those assets going to other parts of state government, like education. Now, it's closing that loophole.

The Department of Justice says that it's changing its asset forfeiture policies for budgetary reasons — which means that the change might be only temporary, and the government might even end up reimbursing local police departments for any assets they don't get a share of now. But for the moment, it's a big deal.

How the federal government helps local police seize people's stuff

After someone is convicted of a crime, the government agencies that arrested and convicted him are allowed to seize property related to that crime (such as a car that was used to commit a robbery, or money earned selling drugs). That's called criminal forfeiture, and that's not something most people have a problem with.

But there's also a principle in the law, going all the way back to English common law, that says when property is involved in a crime, the government can start legal proceedings against the property itself for "participating" in criminal activity. The property doesn't get charged with a crime — instead, it's sued by the government, in a civil lawsuit. (Hence the name "civil asset forfeiture.")

Many states guarantee that any money seized by police, or any profits from auctioning off forfeited goods, goes right back to the law enforcement agency. A few states say police don't get to use any of the property they take — instead, that money goes toward something like state schools. The rest split the difference ... [more]

Friday, January 01, 2016

Another Alleged Craigslist Rental Scammer Gets Stung; Victim Sees Ad For Same Chicago-Area House Listed Under Different Name, Phone Number Two Weeks After Being Screwed Out Of $3,600, Then Tips Off Cops For Successful Undercover Bust; Suspect Faces Felony Theft By Deception Charge

In Plainfield, Illinois, the Chicago Sun Times reports:

A southwest suburban man was arrested for theft by deception after he posted an ad for a rental property in Plainfield that he didn’t own.

Ayham Shamel Alhourani, 18, of the 11000 block of South Columbus Drive in Worth, was arrested for theft by deception, a class 2 felony, according to a statement from Plainfield Police.

On Dec. 8, Alhourani met a man at the property located in the 14900 block of South Morgan Lane in Plainfield, which the man then agreed to rent. Later that day, the man met with Alhourani in Oak Lawn to sign a lease and pay him a $3,600 security deposit, according to the statement.

Alhourani then gave the man a key, but when the man attempted to move in he found that the key did not work. The man then learned that the property was recently completed and that the builder had not closed on it, and that Alhourani was not the property owner, according to the statement.

On Dec. 22, the man saw the same rental ad, which had a different name and number associated with it, and called the police, according to the statement.

An undercover Plainfield detective spoke with the person who posted the ad and agreed to meet at the same rental property. Detectives saw Alhourani walking up to meet the undercover detective, and arrested him, according to the statement.

Alhourani later spoke with police and “provided incriminating statements,” according to the statement.

Two men wanted in a squatting scheme throughout the city, including in Beverly/Morgan Park, have been arrested, according to 19th Ward Ald. Matt O’Shea.

Raymond Trimble and Arshad Thomas, whom O’Shea believes are father and son, are facing felony fraud and theft-related charges, O’Shea said, stemming from accusations that they illegally occupied about a dozen foreclosed homes in the neighborhood.

Trimble was arrested Dec. 10, O’Shea said, and is being held without bond.

Thomas was arrested the week of Dec. 14 on unrelated charges, O’Shea said, which led to the squatting charges. Thomas’ bond has been set at $250,000 for the squatting charges, as well as $250,000 for other charges.

Both are expected to face indictments in January.

Trimble and Thomas are the fourth and final men to be arrested in the case, O’Shea said; Fahim Ali and Torrez Moore were arrested this summer, and O’Shea said that both men are now involved in pre-trial proceedings and have been denied reduced bonds. All four men, according to officials, claim to be part of the Moors, also known as the Sovereign Citizens, who do not recognize U.S. law.

***

Squatting has become a difficult issue to address, officials said, because offenders can file forged documents with the Cook County Recorder of Deeds, which can do little to reject the documents.

Another Real Estate Company-Listed Home At Center Of Craigslist Rental Scam Bust; After Allegedly Screwing Victim Out Of $1,950 Cash Deposit For Renting Property He Didn't Owned, Landlord-Imposter Gets Stung By Cops, Victim's Friend Who Staged Second Lease-For-Cash Exchange Meeting

In Newnan, Georgia, The Newnan Times-Herald reports:

A man is in jail after attempting to lease property that didn’t belong to him.

Joshua Hardigree said that he contacted police after his friend, Roslynn Batups, had attempted to lease a property on 185 Stillwood Dr. after seeing an ad on Craigslist.

After she paid $1,950 cash for the deposit, Batups contacted the rental agency who said they hadn’t rented the property to anyone, according to Sgt. Jim Beneke from the Newnan Police Department. “They sent a representative down who said, “Sorry, we have to evict you,” Beneke said.

That’s when Hardigree got the number from his friend and attempted to set up another lease – this time, with police nearby.

Last Saturday, Hardigree said he attempted to meet the agent he had spoken with, Camilla Jones. However, Jones said she was sending her husband to deliver the lease and receipt.

When Julius DeWayne Ball arrived at the property, Hardigree contacted the police.

Ball told police that his aunt’s name was Camilla Jones and she had sent him to drop off a lease. Police found a cell phone, lease agreement and receipt made out to Hardigree in Ball's possession.

Ball’s Hyundai Sonata also had a temporary Georgia tag, but a North Carolina tag was found in the trunk, according to police. The car was impounded and the items inside were taken as evidence. Police said the car does not appear to be stolen.

Kenyatta Johnson, a leasing specialist for Progress Residential, spoke with police and said that neither Ball nor Jones were authorized to lease any of the properties and that neither of them work for his company.

Beneke said that this particular scam is prevalent around Atlanta presently, and he’s currently working several similar cases from the same rental company.(1)

Ball faces charges of forgery first degree, theft by deception, false writings and statements. He was released on $7,000 bond [].

A Simpson County cemetery owner – who has been convicted previously of cemetery-related charges – is accused of double-selling plots in Simpson County.

Eileen Santangelo, 61, was arrested [] at Restlawn Memory Gardens, a cemetery in Franklin, on a charge of theft by deception.

Simpson County Sheriff’s Office Detective Eddie Lawson, who arrested her, said Santangelo, the former owner of Chapel Hill Memorial Gardens and the current owner of Restlawn, has been accused of selling the same funeral plot to multiple people and conducting business at Restlawn without a proper business license.

The investigation began in November, when people contacted Lawson saying Santangelo sold a plot to them and provided receipts that seemed to confirm the claim, Lawson said. He expects Santangelo to be charged with more offenses soon, he said.

“As of right now, I have one criminal case,” Lawson said. “I have more people calling me, so I’m suspecting more.”

As of [...] three days after Santangelo’s arrest, Lawson had talked to 10 people accusing Santangelo of double-selling plots or selling headstones the buyers never received, and he had six phone messages he had yet to check.

“I’ve gotten a lot calls saying that people have paid for a tombstone and there is no tombstone,” he said.

In July 2010, a Warren County grand jury indicted Santangelo on one count of theft by deception, according to a previous Daily News report. A month earlier, a Warren County grand jury indicted her on three counts of theft by deception, the Daily News reported. She was accused of taking money for gravestones that were not provided at the time.

Warren County court records show that she pleaded guilty to one count of theft and was given a pretrial diversion.

She has also been convicted in Maryland on theft cases relating to funerary services, for which she served prison time, Lawson said. Additionally, Santangelo has been banned from providing funerary services in Warren County, he said.

Thursday, December 31, 2015

Manhattan Feds Bag Trio In Alleged Foreclosure Rescue Scam That Used False Oral Promises Of Loan Modifications Or Short Sale-Leasebacks To Trick Distressed Homeowners Into Unwittingly Sign Away Ownership & Control Of Their Homes, Then Give Them The Boot

From the Office of the U.S. Attorney (New York City):

Preet Bharara, the United States Attorney for the Southern District of New York, [and four others] announced that SAMANTHA BOUBERT, CHRISTINE MAHARAJ, and OWEN REID were taken into custody this week for participating in a scheme to fraudulently induce distressed homeowners to sell their homes to a company associated with the defendants.

***

Manhattan U.S. Attorney Preet Bharara said: “As alleged, these defendants preyed upon distressed homeowners and, through lies and front companies, tricked people into giving up their homes. The damage allegedly caused by these defendants went far beyond financial harm; as charged, their schemes often resulted in victims being evicted from their homes.”

***

From January 2013 through May 2015, SAMANTHA BOUBERT, CHRISTINE MAHARAJ, OWEN REID, and others, (collectively, the “Hillside Fraud Team”) targeted distressed homeowners in the New York City area, including the Bronx, Brooklyn, and Queens. The Hillside Fraud Team, which primarily operated from a Hillside Avenue address, tricked and coerced homeowners into selling or deeding their properties to a Hillside business they controlled.

The Hillside Fraud Team sent mailings to the owners of distressed properties on the letterhead of the Homeowners Assistance Services of New York (“HASNY”), inviting the homeowners to seek assistance from HASNY to avoid foreclosure and save their homes. The Hillside Fraud Team also hired telemarketers to contact homeowners and to invite them to meet with HASNY representatives to learn more about avoiding foreclosure.

REID and others trained and directed the telemarketers to appeal to the emotions of the owners of distressed properties. They developed a script for telemarketers to use in their calls, which included, in substance, a statement that a short sale would be a means for homeowners to lower their monthly payments and still remain in their homes.

Many of the homeowners who sought assistance from HASNY met with a member of the Hillside Fraud team, who typically advised the homeowner that HASNY could assist him or her with a loan modification. In other cases, homeowners were advised that a loan modification could not be completed, but a particular type of short sale could be arranged in which the homeowner would sell the property to a third party, Launch Development, and then a relative of the homeowner could repurchase the property from Launch Development within 90 days. Homeowners typically were told they could remain in their homes throughout the entire process. REID and MAHARAJ both participated in these meetings.

After an initial meeting with homeowners, a closing typically was scheduled during which the homeowner would meet with another co-conspirator who was described as the homeowner’s attorney for the transaction. The homeowners, who had been led to believe that they were about to receive a loan modification or would be able to transfer their property to a trusted relative, were encouraged to sign documents, which in some cases were blank. Unbeknownst to the homeowners, by signing some of those documents, they were agreeing to sell their homes to a Hillside Business – often Launch Development – and would be forced to vacate their homes soon thereafter.

As part of the fraud, the Hillside Fraud Team often used Uniform Commercial Code liens to coerce victims into participating in these deals. BOUBERT filed liens on homeowner properties, even when those homeowners owed no debt to a Hillside Business.

After purchasing a property from a homeowner, members of the Hillside Fraud Team typically appeared at the homeowner’s residence and demanded that the homeowner vacate the premises, or commenced eviction proceedings against the homeowner, or both.

The Hillside Fraud Team generated millions of dollars as a result of their fraudulent scheme.

A 75-year-old Seal Beach man has been sentenced to eight years in prison for a mortgage rescue scheme involving more than 250 victims, most of whom were from the Inland Empire, prosecutors said.

Terry Meisinger pleaded guilty in October to two counts of wire fraud in relation to the scam, the United States Department of Justice said in a statement.

Meisinger had argued for a lesser sentence because of his age, but U.S. District Judge Virginia A. Phillips rejected his request on Monday, stating that Meisinger would “still pose a danger to the public,” prosecutors said. The judge also ordered Meisinger to pay $1.5 million in restitution.

Prosecutors said Meisinger operated a scam in which he made false promises to dozens of distressed homeowners and filed fraudulent bankruptcies to delay foreclosure. He would then rent the properties to third parties as the foreclosure proceedings were delayed, prosecutors said.

“This man earned significant profits as the result of his scheme – profits that came as the result of significant financial harm inflicted upon victims,” U.S. Attorney Eileen Decker said in a statement.

Authorities said Meisinger collected more than $1.5 million in illicit rent payments on more than 100 properties and never made any payments on the mortgages. The scam impacted more than 250 victims, including homeowners, lenders and renters.

During that time, authorities estimate that Meisinger caused more than 300 bogus bankruptcy petitions to be filed in the names of numerous people who had no knowledge their identity was being used.

When lenders got the fraudulent bankruptcy petitions dismissed and completed foreclosure, the renters lost their deposits and rent payments, and were evicted and left homeless in some cases.

Prosecutors said Meisinger’s actions violated a court order from a previous civil matter barring him from participating in home finance and the real estate industry for 10 years. He was ordered to pay $5 million in penalties.

When he pleaded guilty, Meisinger specifically admitted he defrauded a distressed homeowner by inducing him to sign a quitclaim in exchange for promises that included negotiating a short-sale agreement with his lender that would free the homeowner from his mortgage on a property in North Las Vegas, Nevada. But, instead, Meisinger caused a deed of trust to be recorded on the property, which was followed by a fraudulent bankruptcy on behalf of the person who supposedly now held an interest in the home. Meanwhile, Meisinger rented out the home to another person while foreclosure proceedings were stayed as a result of the fraudulent bankruptcy.

Meisinger “repeated the process of causing the recording of deeds of trusts in the names of various beneficiaries whose identities he controlled and causing the filing of bankruptcies on behalf of those lenders to delay the foreclosure proceedings, while collecting rents” on property in North Las Vegas, according to the plea agreement filed in this case.

A family of eight who have moved eight times since their home in Little Egg Harbor Township was damaged by Superstorm Sandy have filed charges against their contractor, JBS Construction of Lower Township in Cape May, for spending approximately $49,257 of their Reconstruction, Rehabilitation, Elevation, Mitigation grant on subcontractors and incidentals not related to their contract to raise their house.

On Nov. 17, Joseph and Gayle Crecca were arrested by the Little Egg Harbor Township police on charges of theft and theft by deception in the third degree. Gayle Crecca was released on her own recognizance and Joe Crecca was released on bail. The Ocean County Prosecutor’s Office has not yet determined the degree of the charges, contingent on whether there are more complaints.

The Ryan-Sasta family of two adults, three teens and two children spent last summer in a camper (the oldest daughter had moved out of state) and was nearly homeless as the summer ended and the campground was closing. “We had a week left, and we literally had nowhere to go. I had never been in that position before,” said Penny Ryan. “Then a friend suggested I call all the churches in the area. Finally, St. Paul’s Methodist Church (in New Gretna) said they had a home next to the church that we could live in; otherwise, we would have been on the street. We moved in on Halloween.”

***

Ryan alleges nothing was done by the contractor over the winter and spring; in June, Ryan and her husband themselves removed the drywall in the two garages of their 4,000-square-foot home. Joseph Crecca agreed to give them $1,000 back for their labor and did so. In August, some of the materials that had been delivered to the site were missing, and Ryan filed a police report that they had been stolen.

In October, Ryan said she was increasingly frustrated by her living situation and excuses from the Creccas; she asked the Little Egg Harbor police to investigate them for fraud. In an affidavit filed with the court, Mahr said he investigated the contractor’s bank accounts and determined most of the money for the Ryan-Sasta project had been spent. A warrant was issued and executed for the Creccas’ arrest on Nov. 17.

A Camden County grand jury late last week indicted the 42-year old Shamong resident on 64 counts for his actions while the CEO of Dream House Windows.

The indictment includes 46 counts of theft by deception, 17 counts of bad checks and one count of theft by failure to make required disposition of property received.

Emachah was first charged in Camden County in July of 2014, but with just four counts for passing bad checks and three counts of theft by deception. Authorities said at the time that additional allegations were being investigated.

Emachah also faces charges in Hunterdon County, New Jersey.

Victims of the charges in the indictment are located throughout New Jersey, New York and Pennsylvania.

When frustrated Dream House customers tried to obtain a refund for work that was not done, Emachah allegedly wrote bad checks to avoid making payments, investigators said.

Eleven people were forced from their apartments Monday night in Gardiner when a fire broke out in a four-unit apartment building at 37 Winter St.

Gardiner Fire Chief Al Nelson said a tenant on the second floor called for help around 9 p.m., reporting light smoke and a crackling noise in the building. Firefighters found fire in a wall and Nelson said it appears the fire started in the electrical system. All tenants got out safely but were forced to find other accommodations for the night because the Fire Department had to cut off electricity and water to the building.

The American Red Cross said three families stayed with friends and relatives last night and would continue to do so for the foreseeable future. The agency would be able to provide assistance with clothing, food and medical needs.

“Now that we know short-term housing has been found, we will continue working (with the families) to ensure all their physical needs are met,” said Eric Lynes, disaster program manager for the Red Cross in Lewiston. “It is better to be surrounded by loved ones at a time like this.”

The building is in foreclosure, according to Gardiner city records. The owner of record, Wade Riley, could not be reached for comment. Riley has a Plano, Texas, address listed on property records.

Lynes said he could not say when or whether the families will be able to return to their homes.

For more, see Gardiner apartment fire displaces 11 (No one was hurt, but tenants were not allowed to stay the night at the Winter Street multi-unit because the electricity had to be disconnected).

Days before a law limiting the timeframe for foreclosed property owners to file a title challenge is set to go into effect, opponents have taken the first step in an effort to have the law suspended and potentially repealed.

The Massachusetts Alliance Against Predatory Lending filed a petition with Secretary of State William Galvin’s office last week seeking to have the law temporarily suspended and put on the ballot as a referendum, a power given to voters under the state constitution and featuring a multi-step process.

Alliance coordinator Grace Ross told the News Service 18 homeowners and activists from Worcester, Shrewsbury, Boston, Springfield, Lancaster, Leicester, Amherst, Cambridge and Medford, signed the petition, which they brought to Galvin’s office last Thursday.

“Even if it’s for a few months, it speaks to something profound about what it means to be a democracy,” Ross said of suspending the law.

The law they are seeking to repeal, titled An Act Clearing Titles to Foreclosed Properties, is scheduled to go into effect on Dec. 31. Ross and a spokesman for Galvin’s office disagree over whether that will still happen, or if the suspension is immediate.

The Massachusetts Constitution allows voters to request a suspension of and referendum on a recently passed law, a process that starts off with the filing of a petition signed by 10 voters.

The petitioners must then gather additional signatures to have the law put before voters at the next state election.

“It’s a constitutional provision that is rarely, if ever used,” Ross said. “It allows voters to suspend and eventually revoke the implementation of the law.”

Brian McNiff, a spokesman for Galvin, confirmed Monday afternoon the petition had been filed and is under review.

***

Aimed at providing some legal assurances to homeowners who have purchased homes in foreclosure, the new law limits property title challenges to either three years after a foreclosure affidavit was filed or one year after the law goes into effect, whichever is later.

The measure’s supporters have said that it will correct a situation in which new owners are left unable to refinance or sell their homes for lengthy periods during which the former owner can dispute the title. Opponents say the law strips recourse from people forced out of their homes in illegal foreclosures.

“Taking away the rights of the first victim isn’t the answer here,” said John Shumacher, who signed onto the petition and is fighting what he describes as an illegal foreclosure on his family home on the Lancaster/Clinton line. “If you send an ambulance to a two-car accident, you don’t run over the people in the first car to get to the second car. That’s what this bill does. It runs over the first victim again.”

Petitioners say the limited time period does not provide enough of a window to mount a title challenge.

For earlier posts on the attempts by Massachusetts lawmakers and the state judiciary to de-claw the Ibanez ruling, see:

Bay State Banksters & Title Insurers Rejoice, Screwed Over Foreclosed Massachusetts Homeowners Lament As Governor Signs Bill That Clears So-Called "Ibanez Title Defects" To Homes Sold In Void Foreclosures Three Years After Sale,.

A Midtown landlord is suing a tenant for $300,000 for repeatedly renting out her apartment on Airbnb for $200 a night.

In papers filed in Manhattan Supreme Court, 357 West 54th St. LLC says Madalina Iacob's bid to make some quick bucks on Airbnb and other short-term apartment rental sites has already cost the building over $60,000 in fines — and could wind up costing it four times as much.
"Under the law, the landlord is strictly liable even though it's the tenant causing the violation — and even though we're not participating in this with this lady," said the building's lawyer, Lawrence Silberman.

Iacob's lease on the small $2095-a-month one-bedroom says that "tenant understands that they may NOT sublet the apartment" — but that's what the yoga instructor and self-described life coach and emotional intelligence coach was caught doing by the city in May, court papers say.

As a result, the building was slammed with four violations by the city, including operating as an illegal hotel, not having the required amount of exits for a hotel and not having adequate fire alarm system for a hotel.

All of the tenants denied to building management that they were the illegal renters, but staff wound up catching Iacob red-handed, Silberman said. [more]

L.A. Landlord Gets Tagged In Lawsuit For Using 'Ellis Act' Eviction To Boot Two Long-Time, Rent Controlled Tenants, Then Peddle Apartments As High-Rate, 'Short-Stay' Rentals; Dispute Also Ropes In Airbnb As Defendant

In Los Angeles, California, the Los Angeles Times reports:

Carrie Kirshman and Nina Giovannitti were close neighbors at their Spanish villa apartments in Fairfax, sharing keys, collecting each other's mail and tending to a communal garden in the backyard.

Their rent-controlled building allowed them to enjoy below-market rents of less than $2,000 a month for their two-bedroom pads in the upscale neighborhood. That came to an end in late 2013 when the owners evicted them under the Ellis Act, a state law that allows landlords to get out of the rental business.

Comparable apartments in Fairfax were going for more than twice as much. Kirshman and Giovannitti were forced to relocate to Mid-Wilshire last year.

"I lived there for 21 years and I was thrown out of my home," Kirshman said. "Just because I didn't own it didn't make it less so my home."

Within weeks, their apartments began appearing on Airbnb — a short-term rental site geared at tourists — for nightly rates that could total $15,000 a month, they said.

Attorneys representing former tenants at 500 N. Genesee Avenue are suing Airbnb and the property owners, who they say violated the city's Rent Stabilization Ordinance.

It marks the first time in Los Angeles that tenants have sued a landlord for withdrawing rent-controlled apartments under the Ellis Act and converting them to short-term rentals, according to the Los Angeles Alliance for a New Economy, an advocacy group allied with labor unions.

Tenant advocacy groups say it's part of a growing problem that has removed thousands of affordable housing units from the market in L.A.

A lawsuit filed [] in Los Angeles County Superior Court seeks damages and an injunction to return apartment units to tenants under previous rates.

***

Tenants in rent-controlled buildings have strong protections against eviction to ensure landlords can't force them out to charge higher market rents. Housing rights advocates say property owners use the Ellis Act to skirt those safeguards.

To invoke the state law, property owners must either exit the business or demolish their buildings to put up new apartments or condos. In the Fairfax case, the owners would be in violation of the rent control ordinance if they rented them via Airbnb for 30 days or more to the same tenant, a city housing department official said.

A complaint was filed last December that the building was being operated as a hotel and short-term rental, but an inspector was unable to verify the information, the official said.

NJ Supremes End Three-Decades Long Eviction Battle, Granting Hoboken Homeowner The Green Light To Give Long-Time Tenant The Heave-Ho, Allowing Landlord To Move Into Her Own House

In Hoboken, New Jersey, POLITICKER NJ reports:

It took a Hoboken woman three decades to evict the tenants in her converted garage apartment so that she could move in. In the end, it came down to how the state’s highest court interpreted a statute intended to prevent tenants from being arbitrarily or unreasonably evicted from their homes.

The New Jersey Anti-Eviction Act

Under the Anti-Eviction Act, the owner of a building that contains three residential units or less can legally oust a tenant if the owner intends to live in the unit.

***

The case, Cashin v. Bello, essentially revolved around the Legislature’s use of the word “building,” which is not defined in the statute. The specific question before the Court was whether “building” denotes a single, unattached physical structure or whether “building” includes all structures owned by an individual that are located on the same parcel of land.

The Landlord-Tenant Dispute

Plaintiff Anna Mae Cashin owns a 2,435 square-foot parcel of land in Hoboken, which contains two separate structures: a six-unit apartment building and a two-story single-family home built in a converted garage. Cashin and her late husband began renting it out in 1971. In 1973, defendant Marisela Bello moved into that unit and continues to live there with her son. The rent is $345 per month, only five dollars more than the rent she initially paid in 1973.

Cashin unsuccessfully sought to regain legal possession of the leased property several times. On January 4, 2012, she sent Bello a notice to quit under N.J.S.A. 2A:18-61.1(l)(3), asserting that the unit was a single-family home and that she, the owner, wished to reside there. Bello refused to leave, and Cashin filed suit.

The trial court dismissed the complaint, and the Appellate Division affirmed, concluding that N.J.S.A. 2A:18- 61.1(l)(3) was not applicable to the separate garage apartment because “building” should be interpreted to mean “premises.” According to the appeals court, it was an additional residential unit of the larger apartment building.

The NJ Supreme Court’s Ruling

The Supreme Court of New Jersey reversed, concluding that Cashin was within her rights as a landowner to evict the tenant. “By the plain language of [the act], we hold that the converted garage constitutes its own ‘building’ for purposes of the act, and that plaintiff may therefore evict defendant,” Justice Faustino Fernandez-Vina wrote on behalf of the unanimous court. [...]

NYC Landlord Slapped With Vacate/Stop Work Order For Allegedly Making Unpermitted Subdivisions Of Apartments In 42-Unit Residential Brooklyn Building

In Brooklyn, New York, DNAinfo New York reports:

The landlord of a 1920s-era Eastern Parkway building has been illegally subdividing a number of units, then turning around and listing them as rental properties, tenants say, prompting the city to slap the building with a series of stop work orders.

The Department of Buildings ordered construction to cease at 85 Eastern Parkway last month, after tenants — many of them rent-stabilized — complained that work had been underway for more than a year to split some of the building’s larger apartments into a pair of smaller units.

Listings still appeared online [] advertising residences at “The Martha Washington” (the name of the the 42-unit building, etched above its doorway) on the Ideal Properties Group realty company website. The Prospect Heights building was touted as the “newest example of great Brooklyn living” with residences that have “undergone a loving, beautiful renovation.”

The site includes floor plans for two two-bedroom apartments, 2CA and 2CB. Those apartments were priced starting at $2,750, according to a Nov. 9 press release from the realty company announcing the rentals.

But the Department of Buildings had slapped a vacate order on unit 2C on Nov. 4 due to a lack of “secondary egress,” or, a second exit in or out of the unit, records show.

And according to blueprints for the original building shared with DNAinfo, the second floor units were originally part of a four-bedroom apartment, unit 2C.

Similarly, unit 1D — which appears to correspond with rentals 1DA and 1DB on Ideal's website — was hit with a stop work order by the DOB for similar egress issues on Nov. 3.

Two Tenants From Hell Use Some Drywall, Studs & Screws To Flip Their $2,500/Month, 3-Bedroom NYC Rental Into 10 Bedroom 'Flop House', Peddling Each Bed For $35/Night On Airbnb; Undeterred Duo Then Took Their Landlord To Court After He Blew A Gasket, Tearing Out Renovations, Changing Locks, & Telling Them To Take A Hike!

In Elmhurst, Queens, WPIX-TV Channel 11 reports:

Eddie Shiew owns a three-story home in Elmhurst, Queens, as a rental property. He recently rented the third floor, a three-bedroom apartment, to Burak Firik and Dogan Kimilli for $2,500 a month.

But after signing the lease, the landlord says he got a call from one of the tenants on the first floor telling him it appeared that construction was going on in the third floor.

Shiew says he went to the building and found that the third floor was in fact being renovated without his knowledge.

“I went in the next day and found they had turned a three-bedroom into a 10-bedroom apartment."

Shiew said it appeared that through the use of sheetrock, a construction crew had divided each bedroom into three small bedrooms.

He says he then discovered that Firik and Kimilli were listing the rooms for rent on airbnb.com, a website for people looking for a cheap place to stay for a short time, usually in someone’s home. And airbnb customers are who PIX11 found living in the apartment. PIX11 spoke with two tourists who were paying $35 dollars a night for a room on the third floor.

When the landlord found out what was going on, he brought some workmen in and tore down all the renovations, changed the locks on the doors, and demanded that Firik and Kimilli leave.(1)

But the two men took the landlord to court.

“They went to court and got a court order against me," Shiew said. “They said I illegally locked them out.”

The judge ordered the landlord to let Firik and Kimilli back into the apartment. While they haven’t done any more renovations, they are creating spaces to rent on airbnb by using curtains as room dividers.

The landlord has hired an attorney and is trying to evict them, claiming the two men violated the terms of the lease. The lease says “except as authorized by the consent of the Landlord, Tenants will not make any repairs or alterations to the premises."

But Firik texted the landlord, “we know the laws very well, you’ll not be able to evict us ever.”

The landlord’s attorney says he expects the court will order Firik and Kimilli out within a couple of months.

PIX11's Arnold Diaz spoke with Firik by phone, who refused to do an on-camera interview and denied doing renovations to the apartment. He claims he and Kimilli live in the apartment, but the airbnb tenants said they have never met the guys renting the apartment. They say the pay airbnb online.

Tuesday, December 29, 2015

Sued Over Old Debt, and Blocked From Suing Back

Clifford Cain Jr., a retired electrician in Baltimore, was used to living on a tight budget, carefully apportioning his Social Security and pension benefits to cover his rent and medication for multiple sclerosis.

So Mr. Cain was puzzled when he suddenly could not make ends meet. Months later, he discovered why: A debt collector had garnished his bank account after suing him for about $4,500 the company said he owed on an old debt.

Mr. Cain said he never knew the lawsuit had been brought against him until the money was gone. Neither did other Baltimore residents who were among the hundreds of people sued by the collector, Midland Funding, a unit of the Encore Capital Group, in Maryland State Court. Some of them said they did not even owe any money, or their debt had long expired and was not legally collectible, according to a review of court records.

In any case, the Encore subsidiary was not licensed to collect debt in Maryland.

Yet when Mr. Cain brought a class action in 2013 against Midland Funding, the company successfully fought to have the lawsuit dismissed.

If the plaintiffs wanted to try to recover their money, they would have to do so in private arbitration. And because class actions are banned in arbitration, Mr. Cain and the others would have to fight the unit of Encore — one of the largest debt buyers in the country with vast legal resources — one by one.

“I can’t for the life of me understand how this is allowed to happen,” said Mr. Cain, who could not afford to pursue his case alone in arbitration.

In short, Encore and rival debt buyers are using the courts to sue consumers and collect debt, then preventing those same consumers from using the courts to challenge the companies’ tactics. Consumer lawyers said this strategy was the legal equivalent of debt collectors having their cake and eating it, too.

The use of arbitration by the companies is the latest frontier in a legal strategy orchestrated by corporations in recent years. By inserting arbitration clauses into the fine print of consumer contracts, they have found a way to block access to the courts and ban class-action lawsuits, the only realistic way to bring a case against a deep-pocketed corporation.

Convicted Lawyer Dodges Major Time In State Prison, 'Buys' His Way Into 12 Month Sentence In County Jail w/ 5 Years Probation After Coughing Up $262K Downpayment Towards $445K Restitution Order For Fleecing Homeowners In Mortgage Assistance Scam

From the Office of the Michigan Attorney General:

Michigan Attorney General Bill Schuette [] announced the sentencing of Stephen Barry Ruza, 52, of Orchard Lake, former owner of Home Legal Group Inc., for one felony count of Conducting a Criminal Enterprise. Ruza was sentenced to 12 months in Oakland County Jail, followed by five years of probation by Judge Nanci Grant in Oakland County’s 6th Circuit Court. Ruza pleaded guilty to the charges of defrauding his victims with a fake mortgage assistance scheme in September.

“Criminals who take advantage of hard working men and women want nothing more than to stay in their homes will not be tolerated,” said Schuette. “The conclusion of this case ensures another bad apple is off the street and I want to applaud my Homeowner Protection Team for their hard work on this case.”

At the time of sentencing, Ruza was ordered to pay $445,895.16 in restitution to the first 297 of his victims. Under stipulations of his plea deal, Ruza could be ordered to pay hundreds of thousands more in restitution based on the final number of victims. That count is still being determined.

His September guilty plea ensures that Ruza cannot operate as an attorney or run this kind of business again in the future. Prior to sentencing, Ruza completed the following:

Provided a list of the 50 satisfied Home Legal Group clients by October 1, 2015;

Paid $262,500 in restitution and will pay any remaining restitution as ordered by the court as a condition of probation; and

Agree to a psychological exam and complete any recommended counseling.

The initial payment of $262,500 will go directly to the victims. Additional restitution will be paid by the Michigan Homeowner Protection Fund, which Ruza is then required to reimburse.

Homeowners Protection Fund

Schuette worked with the legislature and Governor Rick Snyder to establish the $97 Million Michigan Homeowner Protection Fund and ensure these funds are directed toward victims of foreclosure scams or fraud. On August 1, 2012, Governor Snyder signed legislation creating the $97 Million Homeowner Protection Fund.

Manhattan DA Bags Another Lawyer For Allegedly Stealing Over $500K In Real Estate Sales Deposits & Proceeds; Defendant Allegedly Used Later Thefts To Pay Off Earlier Ripoffs As Never-Ending Parade Of Attorneys Accused Of Fleecing Clients' Escrow/Trust Accounts Marches On

From the Office of the New York County (Manhattan) District Attorney:

Manhattan District Attorney Cyrus R. Vance, Jr., announced the indictment of CLAUDINE KING, 38, a former real estate attorney, for stealing more than $500,000 from former clients. The defendant is charged in a New York State Supreme Court indictment with Grand Larceny in the Second and Third Degrees.

“For years, this defendant is accused of telling lie after lie to keep her alleged scams from falling apart,” said District Attorney Vance. “While Claudine King’s clients waited for payments that were rightfully owed to them, King allegedly used their money to repay previous victims of her theft, and pay for business and personal expenses, including charges at Del Frisco’s, Alice and Olivia, and The Standard Hotel. Clients have a right to honest and fair representation by the attorneys they hire, and I encourage anyone who believes that he or she may have been the victim of this type of fraud to call my Office’s Financial Frauds Bureau hotline at 212-335-8900.”

According to the indictment and documents filed in court, between April 27, 2011, and July 15, 2013, KING, previously of the Law Office of Claudine K. King, a real estate law practice located at 110 West 40th Street in Manhattan, stole more than $500,000 from three former clients and from a potential buyer involved in the sale of one of her client’s properties. KING’S theft from each victim followed a similar pattern: she would receive money that she was supposed to hold in escrow on a client’s behalf, then rather than holding that money in escrow, she would spend it, using it either to repay clients she had previously stolen from or to pay her business and personal expenses. When victims inquired about receiving the money owed to them, the defendant would delay, claiming that there were legitimate reasons why that could not happen. In fact, the stolen funds had already been spent, often years prior.

In July 2011, KING received approximately $41,000 as proceeds from a sale of a client’s father’s real estate. The defendant deposited those funds into her escrow account and told the client, an elderly woman in rural Virginia, that she could not provide the funds until closing, which she claimed had not yet occurred. Years passed and KING continued to refuse to turn over the funds despite repeated requests. Unbeknownst to the victim, her closing had occurred in July 2011, and KING had spent over half of the $41,000 in the first month. Only after the victim reported the defendant to the Departmental Disciplinary Committee, First Judicial Department, did KING send the victim a check for half of what she was owed.

In April 2011, a New York based client paid KING $90,000 for use as a down payment on a property he intended to buy. After depositing that money into her escrow account, the defendant spent it in less than a month. After the sale of the property closed, KING was able to delay the discovery of her theft, by claiming that she was holding those funds in an escrow account until a mortgage on the property had cleared. Almost two years later, when the victim asked KING to release those funds to the property’s seller, she could not do so because the funds had been spent years ago.

In January 2013, prior to the discovery of the first theft, the same victim gave KING an additional $50,000 for a down-payment on a second property. When the defendant received that $50,000 she deposited it directly into her law firm operating account, and spent nearly all of it in less than a month. The victim never received a return of the $50,000 that he had provided to the defendant.

In February 2013, KING was representing a third client, based in New Jersey, in the sale of a property she inherited from her mother. A proposed buyer of that property provided KING with a $150,000 down payment, which the defendant deposited directly into her operating account and quickly spent. KING’S client, the property owner, subsequently decided to sell the property to a different buyer and, in March 2013, KING stole $251,000 in total proceeds from that sale. When KING received the down payment, which she was supposed to hold in escrow until the sale closed, she deposited it directly into her operating account. She then used that down payment, and subsequently embezzled sales proceeds, to pay back the $150,000 down-payment she had previously embezzled from the initial proposed buyer of the client’s property, pay personal and business expenditures, and repay the first victim approximately $20,000 of the approximately $41,000 she was owed.

(1) Clients found to have been victimized by a theft by a New York attorney may be able to seek some reimbursement for being screwed over by turning to the The Lawyers’ Fund For Client Protection Of the State of New York, which manages and distribute money collected from annual dues paid by members of the state bar to members of the public who have sustained a financial loss caused by the dishonest conduct of a member of the bar acting as an attorney or a fiduciary.

See generally:

N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;

When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),

Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.

For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

A Moore County grand jury has indicted former Pinehurst attorney and Moore County Board of Education member Lu Pendleton “Penny” Hayes for felony embezzlement of more than $607,000 and related charges. The indictments stemmed from an investigation by the State Bureau of Investigation. [...]

Hayes, who was disbarred by the North Carolina Bar in October of 2014, was indicted on five counts of felony embezzlement, three counts of forgery of instrument, four counts of uttering forged instrument, counterfeiting of instrument, and four counts of obtaining property by false pretense.

***

The indictments are related to incidents that allegedly occurred between November 2011 and March 2014 and affected six individuals or their estates.

In four indictments for embezzlement, the grand jury found that Hayes “unlawfully, willfully and feloniously did embezzle, fraudulently and knowingly misapply and convert to her own use” $335,843.64 from the estate of Joseph George Wilson between October 2012 and March 2013 and another $213,712.76 from Andrea Fabiana Ale between March 12, 2014 and March 17, 2014.

Both are “Class C” felonies and carry a prison sentence between 44 to 182 months each.

Hayes also faces three “Class H” felonies for embezzlement of additional funds totaling $58,283.57 from other clients. Class H felonies carry a possible prison sentence of 4 to 25 months.

The other charges against Hayes are all “Class I” felonies and carry a possible prison term of 3 to 12 months.

***

Hayes was disbarred after she acknowledged misappropriating more than $400,000 in entrusted funds and engaging in fraudulent bank transactions. That action came seven months after the state bar took action against Hayes, forbidding her from serving as an attorney-in-fact, escrow agent, settlement agent, trustee, executor, personal representative or in any other fiduciary capacity.

She was also forbidden from accepting an further funds from clients or third parties in a fiduciary capacity, withdrawing any funds from and/or writing any checks against any account into which a client deposited money, and directing others to withdraw money or write a check against any account into which funds had been deposited until permitted by order of the court.

The organization’s case file against Hayes detailing the infractions in not public record.

Disbarment means Hayes is no longer licensed to practice law in North Carolina.

Hayes previously served one four-year term on the Moore County School Board beginning in 2000.

Prior to the actions against her, Hayes had been licensed to practice law in North Carolina since 1984. She abruptly “retired” in mid-March 2014, and the court appointed a local attorney to serve as a trustee of Hayes’ practice.

(1) The Client Security Fund was established by the North Carolina Supreme Court with its purpose being to reimburse, in whole or in part in appropriate cases and subject to the provisions and limitations of the Supreme Court's orders and State Bar rules, clients who have suffered financial loss as the result of dishonest conduct of lawyers engaged in the private practice of law in North Carolina.

For attorney escrow funds/trust account ripoffs, generally, see:

N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;

When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),

Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.

For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

The Clerk’s office, the group who administers foreclosed property auctions, must give back money to home owners when their foreclosed properties sell at a higher value during auction than what they owed the bank.

Ward estimates that the 62 individuals would receive anywhere between $500 to $169,000.

“I was able to find a person whose mother passed away almost two years ago and her home sold at a foreclosure auction and we had almost 15 thousand dollars to give back to them,” Ward said.

Silicon Valley Bail Bondsman Bagged For Allegedly Charging Extortionate, Usurious Fees In Attempt To Squeeze 75-Year Old Homeowner Out Of Valuable Property Through Foreclosure; Local Prosecutors Fear Inflated Fee Racket By Bondsmen May Be All Too Common In Area Of Skyrocketing Real Estate Values

In San Jose, California, the San Jose Mercury News reports:

The motto of Jake's Bail Bonds -- "Whatever the situtation, I can assist'' -- is exactly the kind of assurance anxious families whose loved ones need to be bailed out of jail long to hear. But prosecutors claim that in at least one case, the only person Jake Peters sought to assist was himself.

Peters, 40, was arrested last week on suspicion of trying to extort money from a Los Altos customer via a manuever that Santa Clara County prosecutors believe may be all too common in the industry. The way it works: Naive families who owe small amounts of money and don't pay on time wind up being charged outrageous fees and interest within a short period of time. If they fail to pay those fees, they risk losing the homes they've put up as collateral, so they are forced to come up with the money.

"It's easy to squeeze people who have property -- no one wants to lose $2 million in equity to pay off a bail premium in this market,'' prosecutor Alison Filo said. "We are concerned there are other victims and encourage people to come forward.''

Peters, who was released on his own recognizance, declined to comment.

His interaction with Los Altos homeowner Greg Chiotti began six years ago after Chiotti's adult daughter was arrested for felony welfare fraud at a time when she had a drug habit her father said she's since kicked. Chiotti initially paid Peters a legitimate $1,500 fee to have her freed on $15,000 bail.

Chiotti's daughter then missed at least one court appearance, prompting the judge to issue a bench warrant for $50,000, Filo said. When the woman reappeared, she was taken into custody and the court terminated the bail obligation.

Peters charged Chiotti another $5,000 fee, and when he didn't pay within about six months, a lien was put on his house, triggering a foreclosure action. Chiotti, who is on a fixed income, then paid Peters the $36,000 the bail agent was demanding -- more than seven times the original $5,000 debt -- to avoid losing the valuable property on a third of an acre.

"I just wanted to save my house,'' said Chiotti, a retired district manager for the San Francisco Chronicle, explaining why he paid Peters. "The bill looked like an official receipt.''

After cashing out a small investment to pay the bill, Chiotti thought that was the end of it. But he recently got another foreclosure notice, claiming he somehow owed Peters more than $100,000. The situation has been stressful for the 75-year-old man.

"I can't eat and I can't sleep,'' Chiotti said. "I love this place.''

This time, he consulted a friend, who urged him to call the District Attorney's Office.

Peters' latest bill includes such charges as $19,500 for "recovery expenses,'' which Filo said could refer to the cost of tracking down Chiotti's daughter. The woman didn't show up in court at one point because she was in drug rehab in the Central Valley, the prosecutor said.

"$19,500? Where did he have to go to get her -- Peru?'' Filo said. "She was in Mariposa.''

To contact the District Attorney's Office with similar concerns, please call 408-299-7400.

Central Florida HOA Accused Of Taking Page Out Of Banksters' Playbook; Homeowners Who Have Fallen Behind On Maintenance Payments Say There's An Orchestrated Plan To Drive Them Into Foreclosure By Inflating Delinquent Dues With Legal Fees, Late Charges; Victims' Attorney: "It Seems Like [The Bill Collectors] Don't Want The Money... . It Seems Like The Real Money Is In Foreclosing On Homes!"

In Poinciana, Florida, the Orlando Sentinel reports:

Poinciana Villages, with nearly 70,000 residents and 23,000 homes, would be one of the largest cities in Central Florida if it were a municipality. Instead, it's the largest private homeowners association (HOA) in the United States.

But now the HOA is under fire for what residents say is a persistent and ongoing effort by outsourced debt-collection agencies to inflate back dues with thousands of additional dollars in legal fees and late charges.

Some of the estimated 4,000-plus homeowners whose debt was sold — more than 1 of every 6 homes in the association — say they've never received a line-by-line breakdown of what those fees actually are. And by the time they're able reach someone at the agency, their late fees and legal fees have doubled, tripled, quadrupled and more.

At issue, residents say, is the possibility of thousands of owners losing their homes because of ballooning debts that were originally only in the hundreds of dollars.

Steve Sepulveres, an attorney hired by Friends of Poinciana Villages, said he and others are concerned about how "the goal posts have been moved" for residents who have fallen behind on their dues.

"It's completely and utterly legal," Sepulveres said. "It may be immoral, but it's legal. But it seems like they don't want the money. If somebody came up to me and wanted to give a payment, I'd take it. It seems like the real money is in foreclosing on homes."

"All the people in the community getting these [charges] and fees thought they were unique," said resident activist Keith Laytham. "And it turns out there were thousands of them." [more]

Embattled Vegas Woman Targeted By Police Probe Into Alleged Guardianship Racket Hit With Censure By Nat'l Credentialing Group For Actions That Led To Foreclosure For Elderly Homeowner Under Her Supervision

In Las Vegas, Nevada, KTNV-TV Channel 13 reports:

An embattled private guardian under investigation by the Las Vegas Metropolitan Police Department is now facing more problems. The guardian's fall from grace all stems from a Contact 13 investigation.

Private Guardian April Parks has been accused of abusing her power and exploiting the people she's court-appointed to protect.

While police develop evidence and build a possible criminal case, Parks is now facing disciplinary action for violating national standards.

Contact 13 first reported on Indig's case in September after Parks failed to pay the homeowner association dues and let the elderly woman's home slip into foreclosure. It sold at auction for $22,000. All without court approval.

"She took control over the home and everything in the home which were trust assets! And she had no right to!" said Indig's daughter, whose name is also Elizabeth.

Indig successfully fought to get her mother out of guardianship. But the house was already gone.

Parks was also censured for failing to file required court documents in a timely manner.

Clark County Family Court Hearing Master Jon Norheim and some judges were aware of all that, but Indig says they failed to do anything to prevent or rectify Parks' actions.

The Connecticut Fair Housing Center, representing Natalie Moore, has settled complaints against a New Haven area landlord, Press Cuozzo Realtors, and one of its real estate sales associates. The complaints, alleging housing discrimination based on the refusal to rent to subsidized tenants, were settled for a total of $40,000.

Ms. Moore, a single mother of two who had wanted to move for many months due the poor conditions in her unit, began searching in earnest for a well-maintained and affordable place to live for her family. In early October, Ms. Moore responded to an advertisement for a single-family, three bedroom detached home in Hamden. The home, located in a quiet residential neighborhood close to shopping and other conveniences, appeared to offer many of the amenities Ms. Moore was hoping to find. Unfortunately, Ms. Moore was told that the property was not up to Section 8 standards and therefore her voucher would not be considered. Press Cuozzo, its associate, and the landlord denied any violation of law.

The complaints, filed with Connecticut’s Commission on Human Rights and Opportunities alleged that the landlord illegally maintained a policy against renting to tenants who utilize rental vouchers; that the real estate agent illegally refused to rent to Ms. Moore because of her voucher; and, that the brokerage firm, in addition to illegally refusing to rent to Ms. Moore, also failed to adequately train and supervise its agents to prevent them from refusing to rent to voucher holders.

The three respondents agreed, without admitting liability, to settle the complaints and have each committed themselves to continued compliance with all fair housing laws. Press Cuozzo has stated that upholding fair housing laws is one of its highest priorities and has agreed to undergo fair housing training.

Pamela Heller, staff attorney at the Center and lead counsel on these matters, explained, “Source of income discrimination disproportionately effects some of our most vulnerable citizens, including single mothers, children, and people with disabilities. It can also be a proxy for race and disability discrimination. The prevalence of such discrimination can be disheartening, but we hope that settlements of this nature will help ensure that others are not subject to unfair treatment.”

(1) The Connecticut Fair Housing Center is a private, non-profit organization providing various services free of charge to Connecticut residents that deal with fair housing matters, including investigating housing discrimination complaints, providing advocacy and representation; referring victims of housing discrimination to attorneys and researching and giving technical assistance on issues related to fair housing. In addition, the Center has been working to ensure that homeowners in danger of losing their homes to foreclosure receive advice and, possibly, referrals to attorneys who are willing to take their foreclosure cases free of charge.

Persons can call the Fair Housing Center if they have been a victim of housing discrimination for any reason including, race, color, ethnicity, national origin, sex, religion, family status, disability, marital status, age, sexual orientation or lawful source of income. Center staff solicits information from callers on the details of the alleged discrimination and may take the following actions: investigate the complaint, offer advice and counseling about fair housing laws, provide free legal representation or make referrals to legal representatives.

CBC News: Betrayal of Trust (A CBC investigation reveals how lawyers across Canada have misappropriated and mishandled clients money, to the tune of tens of millions of dollars, or sometimes even charging vulnerable people top dollar for shoddy services)

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